Steve Charles

COMMENTARY

Time to adjust sales strategy is now

When you add it all up, changes in federal budgets, procurement policy, and technology practically demand fresh approaches to sales. In my final installment of this four-part series on the new realities of federal contracting, I want to offer what we feel are some of those new best practices.

A brief review of the new environment:

  • For fiscal 2012 and beyond, what’s new is not the government’s strong emphasis on costs, but that this occurs as IT budgets have stopped growing. For some departments, budgets are shrinking. That means agencies are searching for ways to squeeze dollars out of operations and maintenance costs to free up sufficient funds for technical innovation. This is always good practice, but now it’s also the Office of Management and Budget’s strategy and it controls the IT spending plans that are forwarded to Congress.
  • Technologically, the government is pursuing a number of initiatives aimed at operations and maintenance costs, including mobility, cloud computing, and data center consolidation. The IT reform strategy from OMB sparked a renewed interest in modular application development and use of shared enterprise services.
  • For acquisition, the government is limiting creation of new government-wide acquisition vehicles while strongly emphasizing firm, fixed price services contracts. The administration is continuing TechStat sessions to review, and potentially kill, late and over-budget projects. And from both the administration and Congress come strong commitments to use more small, disadvantaged, women and minority-owned contractors. Plus, new language puts manufacturers and intermediaries in the government’s supply chain on the hook for counterfeit parts.

Another acquisition move, the mythbusters campaign, aims to encourage contracting officers and program managers to open up more pre-solicitation verbal discussions between government and industry during the market survey and requirements definition phases of acquisitions valued at more than $150,000. Reinforcement mythbuster memos are expected from the Office of Federal Procurement Policy in the next couple of months. Mythbusting 2 includes advice for industry on such contact, emphasizing the need to participate in industry days, respond to requests for information and ask for debriefs.


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Sales groups should become familiar with the mythbusters campaign. It’s true that program managers and contracting officers haven’t exactly flocked to embrace the tenets in the February 2011 mythbusters memo. Nevertheless, salespeople should become conversant with the rules about timing and content of communications with the government and comfortable about using these opportunities to more effectively to communicate why your technology offers the best value in a particular situation. This is when real selling activity occurs.

We think the new environment requires some adjustments in sales strategy, and even product strategy insofar as product changes enable the crucial sales tactics needed to keep winning in the federal market. Sales must emphasize:
• Efficient deployment with predictable schedule and cost. In many ways, the app revolution consumers enjoy on their mobile devices has spread to the enterprise. The government has become enamored of fast solutions resulting from online challenge grants. So speed will be seen as a virtue.
• Reference accounts, especially in closely competitive situations. They demonstrate learning curve experience and play to the government’s policy of rooting out duplication.
• Moving from capital expenses to operating expenses, funded by reducing current operations and maintenance costs
• Total cost of ownershipand how products and services lower the government’s costs.
• Supply chain integrity for sales of hardware. Your assurance of factory-authorized parts and clear chain of custody will help your customers with their own supply chain integrity efforts.

A final thought: Manufacturers and channel players alike should re-examine their channel strategies, emphasizing delivery speed and quality. Equally important, the channel mix should include partners able to deliver products as fixed-price services.

This is an exciting time as new players are emerging and strategic relationships are being formed.

Reader Comments

Tue, Jun 12, 2012 Mariano Tellarini www.masthink.com

Very interesting article. I agree, long term task orders are being increasingly broken down into modular deployments. This is not new nor is it happening because the government just wants quicker ROI. I believe the increased appetite for Firmed Fixed Price cost engagements is what's driving the behavior. Somehow FFP increases should be expected during budget crunches. When funds are scarce, contracting officers try to reduce their exposure to project overrun risks and FFPs provide that hedge. PMOs would rather have fewer but completed projects. At the end of the day, a project that never got awarded for lack of funding is not one of the CO responsibilities. Corollary: Align with your OEM/Distributors and optimize your business for FFP orders. 2- SMB set-aside business quotas are not being met largely because the SMB community does not effectively engage with the contracting offices. Contracting officers cannot be responsible for business developers not coming forward with compelling feedback for their value proposition. Corollary: Get your OEMs and Distributors behind you and meet with the government. Careful though, choosing a technology brings its own set of risks that need to be assessed. 3- IT Service providers need to quickly mature their business processes to be able to handle not only labor but also equipment. Unfortunately, this process re-engineering takes time and entails profound adjustments to daily operations. Small businesses that don’t procure their own hardware and software will irremediably come forward ill equipped. In a growing market, SMB can afford to leave money on the table. Not these days. Corollary: Align your operations and finance strategies to support the needs of your evolving sales initiatives.

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